Worst Power Shortage Likely In May and June, Davis Warns

Lynda Gledhill, Chronicle Sacramento Bureau

Published 4:00 am, Wednesday, April 4, 2001

2001-04-04 04:00:00 PDT Sacramento -- Gov. Gray Davis acknowledged yesterday that the state would fall short of its goals for increased power generation this summer and warned that the toughest phase of the energy crisis might be just weeks away.

Davis said May and June would be the most critical time for rolling blackouts because several planned new power plants would not be on line. He said only 4,000 megawatts of new power would be flowing by summer's end, a sharp drop from the 5,000 megawatts he had promised in February to have on line by the start of summer.

"I hope we don't have major disruptions," the Democratic governor said. "But we're hoping for the best and preparing for the worst."

Davis' frank admission came after a meeting with Senate Democrats to discuss the energy crisis. Many lawmakers have expressed frustration with the lack of information coming from Davis and his aides as the energy crisis drags on.

The governor plans to discuss the crisis during a five-minute statewide television address at 6:05 p.m. tomorrow.

Despite the gloomy forecast, Davis said he thought California would be generating more power than it needs in three years, but "we have to get through the next two (years)."

Yesterday everyone agreed that only conservation and luck would prevent summer blackouts.

"Everyone's concerned," said Sen. Debra Bowen, D-Marina del Rey, chairwoman of the Senate's energy committee. "It's not possible for me to be more concerned. We're hearing from businesses about the economic impact of the interruptions of power supply. They are more concerned with the reliability than the price."

The Public Utilities Commission approved last week a tiered electric rate increase averaging 40 percent in the hope that higher prices would encourage conservation.

Lawmakers might take even more drastic action. Some senators said there is growing support for using the state's power of condemnation to seize private power plants.

Under the state's 1996 deregulation plan, the major utilities were required to sell many of their power plants to private firms. State Sen Jackie Speier, D-Hillsborough, said senators now believe the state should take over those generating plants.

CALL FOR BOLD ACTION

State Sen. Don Perata, D-Oakland, said he and several other lawmakers have told the governor he must take bold action so people can be confident in their leadership.

"I told him he needs to sell energy the same way he sold education," Perata said, adding that he supports taking over the power plants.

"If in fact we're being taking advantage of by a school-yard bully, we need to put a roll of pennies in our fist and cold-cock the guy," Perata said.

Speier said the governor did not dismiss the condemnation idea outright.

Other lawmakers believe that there is also support for a windfall-profits tax on private generators that have made huge profits during the power crisis. Money raised by the profits tax could be returned to consumers or to the state for its power purchases, which have topped $3.7 billion so far this year.

The administration wants to buy the transmission lines to help restore financial solvency to the state's investor-owned utilities, including Pacific Gas and Electric Co. The utilities would then be able to use the money to pay off their $14 billion debt.

Southern California Edison already has tentatively agreed to sell the state its transmission lines for almost $3 billion.

Negotiations for PG&E's transmission lines have bogged down. Davis said he also is considering a backup plan to acquire PG&E's hydroelectric plants should PG&E or Uncle Sam scuttle the transmission system deal.

PLANS THREATENED

"Part of the negotiations is that if the transmission lines purchase is not approved by the federal government, we would still get an asset like the hydro plants," Davis said.

As the crisis wears on, Davis has become a leading proponent of energy conservation. Davis has promised a 20 percent rebate on power bills to all Californians who reduce their electricity consumption by one-fifth beginning June 1.

Davis continued his push yesterday, encouraging lawmakers at yesterday's meeting to pass several conservation bills this week. But two key conservation bills faced difficult hearings yesterday.

Now Playing:

An Assembly bill that would spend $400 million on various conservation efforts stalled in the Senate Appropriations Committee because the Davis administration had not agreed to it.

The second bill, by Sen. Byron Sher, D-Palo Alto, which would allocate $700 million for conservation measures, has been languishing for weeks. It passed the Assembly Appropriations Committee yesterday over the objections of the author, after negotiations between Democrats and Republicans the night before.

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